Telecom on creditwatch

Telecom has been put on Creditwatch over its plans to split it operations.

Ratings agency Standard & Poor's said today it had placed the telco, its related entites and debt issues on Creditwatch with negative implications.

Telecom announced on Monday it had submitted a proposal to Crown Fibre Holdings to separate the company's fixed line assess network from its remaining businesses.

In May Standard & Poor downgraded its long-term outlook for Telecom from stable to negative.

While it affirmed its A long-term and A-1 short-term corporate credit ratings, analyst Paul Draffin said S&P considered Telecom's vertically integrated business model a key driver of the group's business risk profile.

Telecom chief financial officer Russ Houlden said the company was committed to seeing it maintain its single A credit ratings.

"We believe that Telecom's proposal to Crown Fibre Holdings aligns the interests and incentives of Telecom, its shareholders, the Government and New Zealanders."

- NZ HERALD